
Book_i_ 



._ — 



CppyrigtaN?.. 



COHRIGHT DEPOSIT. 



THE 

Coming Land Policy 



WILLIAM THUM 
ii 



The Antithesis of the Single Tax Policy 



Supplement to 
UNTAXING THE CONSUMER 



I920 

WILLIAM THUM 

Publisher 
Pasadena, California 



Press of Pasadena Star-News 



\$ 






Copyright, 1920, 
By William Thum. 



5)Ci,A559990 
m -8 1920 



CONTENTS 

PAGE 

Introduction i 

Foreword 1 

Need of An Able National Land Commission . 1 

Reasonable Socialization 3 

Must Stop Land Speculation 4 

First Step (Rural Colonization) 6 

Second Step, Part A. (Maximum Legal Selling 
Price Beyond Which the Public Cannot Le- 
gally Go) 6 

Second Step, Part B. (Maximum Legal Selling 
Price in Transactions Between Private In- 
terests) .17 

Five Checks to Speculation 20 

Third Step (Unlimited Right to Condemn Pri- 
vate Land), How to Solve the Land Problem 

in Cities 27 

Fourth Step (Minimum Use of Land) . . 28 
Fifth Step (Introduction of Tax on Individual 

Incomes Derived from Settlement Lands) . 29 
Sixth Step (Fixing Maximum Size of Tax- 
free Parcels of Land and Amount of Taxes 

on Excess Holdings) 32 

Seventh Step (Price Regulation of Essential 

Agricultural Products) . . 34 

Eighth Step (Eliminating the Items of Raw 
Land and General Public Improvements from 
the Maximum Legal Selling Price) . . .35 
Ninth Step (Placing All Agricultural Land Un- 
der the Farm Settlement Plan) .... 37 



CONTENTS— Cont. 

PAGE 

The Most Important Step (A Land Problem 

Commission) . 38 

Contemporary Steps (Obtaining Public Control 
Over Our Other Natural Resources) ... 39 

Time Table Condensed 43 

The Possibility of Carrying Out the Land Policy 48 
Appendix One (The Writer's Qualification) . . 50 
Appendix Two (Equalizing Economic Oppor- 
tunity in Agriculture) 54 

Appendix Three (The Department of Agricul- 
ture's Stand on Cost Keeping for Farmers) . 59 



THE COMING LAND 
POLICY 



SUPPLEMENT TO 

UNTAXING THE CONSUMER 



INTRODUCTION 



This summer I intended to revise my book "Un- 
taxing the Consumer", and so informed my corre- 
spondents, as it needs improvement in many places. 
For the present reader who did not see the book 
I quote from its introductory pages with slight 
modifications, and suggest that the book be read in 
full in connection with this discussion. 

"Although this book deals largely with the 
untaxing of the consumer, in addition to that 
its first two chapters treat the land question 
in its relation to prices of commodities. The 
purpose is really to ask questions and not, as 
might seem, to offer convictions or facts; also 
to show advocates of various tax systems the 
nature of the numerous thoughts and questions 
that are likely to arise when citizens are pon- 
dering how to vote on Single Tax and other tax 
laws. Some of these questions are old and 
have been discussed many times, while others 
are new and have as yet received little atten- 
tion, though they bear on the old and make it 
necessary to seek new answers. The remaining 
chapters show how we can eliminate the al- 
ways troublesome tax problem from the last 
great natural resource still remaining in pos- 
session of the public. * * * * The tax 
question, coupled with inseparable economic 
questions, creates a problem so deep and com- 
plicated that the best amateurs soon become 
lost in a quest for its solution. To solve the 
problem by nation-wide experimentation form- 



11 



INTRODUCTION 



ulated by men of insufficient experience would 
take hundreds of years, and would do avoid- 
able harm in the meantime to the American 
public. Some way ought to be found to ap- 
point a commission of life-time experts on 
taxation and economics, composed of people 
who possess the broadest possible social train- 
ing and experience and who can be influenced 
by nothing except facts as they see them after 
due study. It should include men who, in the 
field of research, measure up to the reputation 
of Professors Richard T. Ely and Edward Als- 
worth Ross of Wisconsin, Thomas S. Adams of 
Yale, R. A. Seligman of Columbia, 0. M. W. 
Sprague of Harvard; also men who are ac- 
knowledged leaders in business management 
and labor. Their task should be to formulate 
in detail a tax plan and work out a revision of 
such part of the social system as may be im- 
perative in making fair taxation possible, and, 
what is of equal importance, the commission 
should devise a thorough scheme for fully in- 
forming the public regarding this plan and 
for putting it into practice. 



"Why do Congress and our State Law-mak- 
ers leave this vital problem to be bungled over 
by self-appointed amateurs, like the writer 
of the present book, and others? A develop- 
ment of the answer to this question would re- 
veal why, as a general thing, our better 
planned progressive economic and social moves, 
usually only of the most limited extent, how- 
ever, are inaugurated after amateurish efforts 
of self-appointed economists and sociologists 



INTRODUCTION iii 

become a serious menace to what little orderly 
development there is in problems of this kind." 

Instead of rewriting "Untaxing the Consumer" 
this summer, I decided to spend the time in pre- 
paring this supplement, giving a somewhat specific 
outline of what I believe may be the coming land 
policy. The dates that I have arbitrarily given for 
the inauguration of the various steps of the coming 
land policy are premature, unless Business itself 
takes hold of the land problem with a clear under- 
standing of the same and a high public spirit. My 
intention is to write a second supplement next 
year as a justification of the land policy de- 
scribed in the present supplement. I plan still later 
to rewrite both supplements and the original book, 
adding new material, all to be bound in one cover. 
(See Appendix One, page 50.) 

In spite of the work required to develop and 
administer the land policy here described and the 
new tax policy that must eventually become a part 
of it, the adoption of this scheme, which is the an- 
tithesis of the Single Tax policy of Henry George, 
will present far less difficulty than the development 
and application of Single Tax. What is of com- 
manding importance in this connection is that the 
coming, or free, land policy is in harmony with the 
most logical and inevitable line of development in 
all other branches of social growth and will, there- 
fore, be a co-operative rather than a disturbing ele- 
ment in social advancement. The elimination of 
any important disturbing element by using a little 
more reason and a little less trying, costly experi- 
ment is a matter of the greatest importance to pub- 
lic welfare. WILLIAM THUM. 

Pasadena, California, October 1, 1919. 



THE COMING LAND POLICY 



Foreword. The coming Land Policy is not a 
matter of fancy. It is here in its incipient stages 
and is bound to reach its maturity in the course of 
time, regardless of the intervention of disturbing 
interests and experiments. However complicated or 
difficult the plan described in what follows, as 
practical knowledge in regard to it accumulates, it 
will appear simpler and finally be regarded as an 
ordinary feature of a complex social scheme. We 
doubtless have men who can frame a plan that will 
be highly serviceable at once, although it will take 
years to perfect it. And not only will the applica- 
tion of the policy become easier with experience; 
but, as soon as it takes on an orderly, fairly ad- 
vanced form, it will so react on the other features 
and policies of the great social scheme as to im- 
prove general social relations and conditions al- 
most beyond imagination. To bear with a few 
years of increased difficulty or complexity in the 
public administration of our greatest resource, land, 
in order to gain hundreds of years of a higher so- 
cial life is a profitable undertaking. 

Need of an Able National Land Commission. 

To carry out the suggested plan would do less 
violence to our social organism than if we followed 
our usual method of meeting questions of this 
sort, yet it would result in an earlier and greater 
good to society at large. Our present method, as 
is well known, consists of treating isolated symp- 

1 



2 THE COMING LAND POLICY 

toms, after conditions have become dangerous or 
unbearable., with limited palliative measures. It is 
true, we often start boldly to correct some general, 
deep-seated social ill by sweeping, superficial ex- 
periments; but the net result corresponds with the 
means employed. Although it is not possible that 
any general land policy will ever be suggested in 
which errors will not appear that must be soon 
corrected, if prepared with honest intent by the 
most highly qualified of our students and workers 
in economic fields, the scheme devised by them 
would be invaluable — in fact, indispensable in 
profitably carrying out the desired reform. This 
raises the question, why do they not do it? The 
expenditure of both time and money to accomplish 
this properly is too great for trained economists 
to bear alone. It is, therefore, necessary that the 
public be awakened to the necessity for a correct 
land policy, that the required funds may be made 
available and that a commission or commissions, 
made up of capable men, shall be demanded by 
public opinion. 

A Serious Obstacle to Agricultural Business. 

Hardly anything could demonstrate more forc- 
ibly than an experience of Dr. William J. Spillman, 
in the United States Department of Agriculture, the 
almost insurmountable opposition that our pro- 
fessional men must meet in endeavors on their part 
to introduce a reform of real significance. As 
chief of the Office of Farm Management in this 
Department he endeavored to devise a thorough, 
practical system of cost-keeping for the American 
farmer. Now, farming done in the interest of the 
agriculturist and the consumer, and not largely in 
the interest of intermediaries urgently demands 



THE COMING LAND POLICY 3 

the application of an accurate and practical system 
of accounting and cost-keeping. The Agricultural 
Department , in contrast with its exceptional effi- 
ciency in most directions, has been and still is an 
obstacle in the matter of cost-keeping of farm pro- 
duction. But, accounting and cost-keeping are 
the very foundation of management in every kind 
of business — as much so in farming as in the larg- 
est industrial enterprises. In fact, cost-keeping is 
one of the most important features in the first 
step of the new land policy, especially as it ap- 
plies to farms. It is significant that, after Dr. 
Spillman's removal from the Department, this De- 
partment deliberately abandoned the development 
of a system of cost-keeping for farmers. The 
Doctor's own statement in Appendix Three, on page 
59, reveals the blind, antagonistic attitude of 
certain large financial and industrial interests to- 
wards enlightening the farmer concerning methods 
for determining the cost of production. Farmers' 
organizations might well consider employing Dr. 
Spillman, or some other qualified man, to carry 
out the work that he was prevented from complet- 
ing. 

Reasonable Socialization. 

The land policy outlined in this chapter, al- 
though not based on an intensive study of the sub- 
ject, but on practical experience, sets forth some of 
the principal points that must be considered in 
framing any land policy. It also is offered to pre- 
sent the idea of establishing social plans with time 
limits conservatively fixed for their successive 
stages, thus furnishing a clear goal to work for 
and a better basis for sustaining hope than is now 
in vogue. 



4 THE COMING LAND POLICY 

To enter upon all the calculations and to keep 
all the records required to carry out what follows 
will seem a very large task to those unfamiliar 
with such business methods. But, after this public 
work is once standardized, it will prove relatively 
simple. The business experience accruing to the 
general public through working and carrying out 
the plan will be a great, if not vital, aid in properly 
socializing our country in its more common eco- 
nomic phases or activities, leaving the higher hu- 
man activities for individual undertaking and thus 
permitting the development of a superior type of 
individuality. 

MUST STOP SPECULATION IN LAND 

State Land Settlement Scheme. 

The State Land Settlement plan of California, 
together with affiliated State activities, if given a 
fair trial, will doubtless accomplish most of the 
objects defined on pages 62, 63 and 64, in the first 
edition of "Untaxing the Consumer", and will 
finally settle our perplexing land question as far 
as it relates to agriculture; provided speculation 
in the land coming under this plan is brought to 
an end relatively soon and methods are adopted 
to relieve the consumer from paying indirectly or 
otherwise any and all land taxes. (See Appendix 
Two, page 54). 

By the terms of the California State Land Set- 
tlement law of 1917 the State purchases and sub- 
divides land suitable for farm communities and 
develops the tract with roads, an irrigating system, 
model homes, etc. It then sells farms to settlers at 
cost for a reasonably moderate cash payment down 
and small annual installments, charging five per 



THE COMING LAND POLICY 5 

cent interest on deferred payments. It also pro- 
vides these settlers with such Farm Advisers as may 
be necessary. 

Possibility of Failure. 

But, until the taxes on farm lands (as well as on 
improvements) are eliminated, the consumer will 
always have to pay them, however indirectly, and, 
unless a minimum use of the land be exacted by 
the State as a condition for continued ownership, 
and proper rules be established for determining its 
maximum allowable selling price, as well as the 
maximum allowable rent based on such price, spec- 
ulation cannot be reduced to the minimum and the 
work of the State Land Settlement Board will never 
result in the good it seeks to inaugurate. A similar 
statement applies equally to urban land. 

Working Out the Problem. 

What follows constitutes a tentative plan for 
working out the major part of our land problem 
within twenty years or thereabouts, and for its prac- 
tically complete solution in the next sixty years. 
Some scheme similar to this will probably have to 
be followed before our land question can be settled 
finally and satisfactorily. 



6 THE COMING LAND POLICY 

1919 and Later. 

THE FIRST STEP. 

(Rural Colonization). 

The State of California through its Land Settle- 
ment Board is buying, platting and improving ag- 
ricultural land and selling it to actual settlers. 
The Board and other governmental agencies are 
disseminating agricultural knowledge and are in 
many other ways improving rural conditions, to 
insure the success of colonization. This will prob- 
ably be continued indefinitely. 

As soon as the Board has demonstrated in actual 
practice that it has developed a thoroughly suc- 
cessful method as far as colonization goes, the 
"second step" will be in order. 

Present indications are that unqualified success 
for the first step will be proved by the end of the 
year 1919, and will be universally recognized 
within a year. 

1921 

THE SECOND STEP. 

PART A. 

(Maximum Legal Selling Price beyond Which the 
Public Cannot Legally Go.) 

Part A: This step should be taken not later 
than 1921 and should consist of devising in detail 
a method for determining and putting into effect 
the maximum legal selling price of any State Set- 
tlement Farm, in cases of purchase or condemna- 
tion by the Public. Unless the owner be willing to 
sell at a lower figure, this price will equal the com- 
bined money values of: 



THE COMING LAND POLICY 7 

a. Raw or bare land, including appurtenant 

general and special public improvements 
paid for prior to purchase of the land by 
the State. 

b. Appurtenant general public improvements 

paid for through taxes after the original 
purchase of the raw land by the State. 

c. Appurtenant special public improvements 

paid for through assessments or other- 
wise, subsequent to the original purchase 
of the raw land by the State. 

d. Private improvements, including growing 
crops. 

e. Initial overhead cost. 

It must not cover the value of: 

a. Special features. 

b. Site value (economic advantage resulting 

from location) . 

EXPLANATION OF EACH COMPONENT PART, 

OR SUBDIVISION, OF MAXIMUM LEGAL 

SELLING PRICE OF SETTLEMENT 

FARMS IN CASES OF ACQUISL 

TION OF SUCH FARMS 

BY THE PUBLIC 

Raw Land. 

For the purposes of this discussion, when Set- 
tlement Farms are sold by private owners the value 
of land in its raw or nearly raw condition is based 
on the original purchase price paid by the State 
when procuring the tract for subdivision, it being 
understood that the State will first have sold the 
Settlement Farm to the farmer for an amount which 
includes the raw land practically at the said pur- 
chase price, plus expenses of handling. 



8 THE COMING LAND POLICY 

Haphazard determination of prices. — Under our 
present social system the selling prices of a vast 
majority of things, including land, that are objects 
of sale on the market are determined by a crude, 
unscientific and haphazard method. 

Especially in cases of sales between private in- 
terests the commercial selling value of a farm, 
whether it be a highly improved five-acre lot or a 
slightly improved hundred-thousand-acre ranch, is 
based on, or rather influenced by, many conditions, 
such as (a) directly appurtenant public improve- 
ments; (b) a certain portion of indirectly appur- 
tenant public improvements; (c) present worth of 
private improvements belonging to the farm; (d) 
net benefits accruing to the farm from public and 
private-owned public utilities; (e) value of other 
benefits accruing to the farm from its being an in- 
tegral part of a community, or social organization, 
to the development of which it may or may not 
have contributed a reasonable share through taxa- 
tion or otherwise; (f) estimated prospective net 
income, whether this be expected from the business 
or rent or increase in selling price of the farm, or 
all three; (g) special features; (h) a biased state 
of mind both of purchaser and seller at the time 
of sale (the latter often endeavors to influence a 
buyer in believing the property worth much more 
than its real value, and the buyer, purposely or un- 
intentionally, just as often underestimates its value) ; 
(i) financial needs of the seller; (j) financial re- 
sources of the buyer; (k) the method and rate of 
taxation; (1) demand. 

The result (expressed in terms of money) of the 
above mentioned influences acting in combination, 
except the value of private improvements, is super- 
ficially regarded by many Single Taxers as the site 



THE COMING LAND POLICY 9 

value. In a manner most people still regard the 
selling price thus evolved as the equitable price of 
land. Fortunately all of these enumerated influ- 
ences affecting the commercial price of farm land 
have had up to the time the State buys it a rela- 
tively weak effect on the price of the class of land 
the State Land Settlement Board must acquire for 
colonization purposes, and these influences are 
bound to remain of slight effect and even to become 
weaker as our new land policy develops. But it is 
to be remembered that the price of item "Raw or 
Bare Land", up to the date of purchase by the 
State, is reached or developed under such influences 
as those enumerated. In fact, the combined effect 
of these influences practically establishes the price 
that the State must pay and, as already explained, 
what the State thus pays is essentially the amount 
regarded as the value of raw land in the present dis- 
cussion. This statement is made on the assumption 
that the State will not acquire other than undevel- 
oped or lightly developed land for subdivision 
purposes. In this connection the thing of vital im- 
portance is that, after purchase by the State, no 
addition shall be made to the price of the raw land 
item of any Settlement Farm, except for the cost to 
the State of handling it. 

Scientific price of farm land. — Truly there can 
be no clearly defined relationship between the 
price and the intrinsic value of farm land at the 
present time. But, before many years, it will be 
generally apparent that in a society having highly 
specialized production prices of all necessities and 
fundamentals — especially of land — must be based 
on the most scientific principles. As a matter of 
fact prices should be a thing of first concern and 
consideration. 



10 



THE COMING LAND POLICY 



As explained under the eighth step of this article, 
the item Raw Land should in the course of time 
be altogether eliminated from figuring as an item 
of value in the maximum legal price of Settlement 
Farms. 

General Public Improvements. 

General Public Improvements, for present pur- 
poses, are improvements paid for out of general 
taxes; that is to say, out of taxes levied in com- 
mon against all the individual private properties 
in any political subdivision, in amounts irrespec- 
tive of the particular benefits that may accrue to 
such properties individually from these improve- 
ments. It would not matter whether these general 
improvements belonged to the State, as, for in- 
stance, the State capitol building, the State uni- 
versity, or State harbors; or to the county, as the 
County Court House, County Hospital, or county 
bridges; or to the district, as public schools, roads 
or storm drains, etc. 

The amount included for general public improve- 
ments in the maximum legal selling price of a 
Settlement Farm should be the value of the pro- 
portional part of this kind of public improvements 
that apply to the piece of land under appraisement, 
meaning such proportion of the improvements as was 
paid for out of general taxes (as distinguished from 
special assessments) levied on the farm subsequent 
to the original purchase of the raw land by the 
State Board. Proper amounts for depreciation and 
obsolescence of these improvements, up to the time 
of determining their value (being the date of con- 
demnation or repurchase of the farm by the State), 
would have to be deducted. However, at some fu- 
ture date — call it 1930 — when the method of taxa- 



THE COMING LAND POLICY 11 

tion will have become appreciably better, the cost 
of any further improvements met through general 
taxation should cease entering into the maximum 
legal selling price of any Settlement Farm, and 
that part of the price at the time covering general 
public improvements should, as it were, be gradu- 
ally liquidated by the State in the manner provided 
for in Step Eight. 

Special Public Improvements. 

For present purposes we will consider as special 
public improvements those paid through special 
assessments levied only against properties particu- 
larly benefited, — each property being assessed rela- 
tively for any definite improvement according to 
the benefit it is believed to derive from that im- 
provement. The amount included for special pub- 
lic improvements in the maximum legal selling 
price of any Settlement Farm should be the present 
value of the proportion of such public improve- 
ments as has been paid for through special assess- 
ments levied against the farm in question. To this 
should be added the present value of public im- 
provements which are beneficial to the farm and 
which have been constructed through private initia- 
tive and paid for by voluntary contribution in be- 
half of the farm. As in the case of general public 
improvements, depreciation and obsolescence would 
have to be deducted. 

'More Technical Divisions. — To be very technical, 
the original price per acre that the State Land Set- 
tlement Board pays for large subdivision tracts 
might logically be divided into three parts: one to 
cover the raw land proper, one to cover the acre's 
share of special public improvements paid for out 
of special assessments on the land up to the time 



12 THE COMING LAND POLICY 

of its purchase by the State Board, and the third 
to cover the acre's proportion or share of the gen- 
eral public improvements paid through general 
taxes up to that time. If this original purchase 
price were thus divided, the amounts respectively 
covering special and general public improvements 
would naturally be added to and incorporated with 
the corresponding amount accruing after purchase 
of the land by the State. If this course were pur- 
sued, the value of raw land would be somewhat less 
than the amount arrived at above under the caption 
"Raw Land", and the value of both special and gen- 
eral public improvements would be correspondingly 
more than the amount determined according to the 
above preceding three paragraphs; but for conveni- 
ence and for other practical reasons, the value of 
raw land and of special and general public improve- 
ments., as determined under their three respective 
captions, will be employed in the discussion which 
follows. 

Private Improvements. 

To ascertain the maximum legal selling price to 
be paid by the public for private improvements on 
these farms, the so-called "present worth" or "re- 
production cost" must be determined through care- 
ful appraisement of all preparation for growing 
things, such as land leveling and cultivation and 
enrichment of the soil ; of all plant life, as fruit and 
shade trees and crops; of all structural improve- 
ments, as dykes, ditches, drains, fences, buildings, 
and any other things of value appurtenant to the 
farm that have cost labor or forethought to create 
or conserve. Proper amounts for depreciation and 
obsolescence must also be taken fairly into account 



THE COMING LAND POLICY 13 

in determining the net value of all structural im- 
provements. 

The usual official auditors and assessors 
equipped with modern training can co-operate in 
devising plans to keep the records of private im- 
provements in such manner as to reduce to a mini- 
mum the labor and cost necessary to make these 
calculations and appraisals. Indeed, this can be 
done not only in connection with private improve- 
ments, but w T ith raw land and public improvements 
as well. 

Initial Overhead Cost. 

The officially estimated average of the so-called 
"overhead cost" of putting a Settlement Farm of 
any classification or type into operating or business 
condition, as of the time appraisement is made, will 
probably be expressed principally in terms of per- 
centages based on the total fair net worth of the 
private improvements on the farm, i. e., those 
which are necessary or desirable for the operation 
of the farm. These percentages for the different 
classes of farms would have to be determined by 
methods similar to those already standardized by 
public authorities in making inventories of assets 
of private-owned public utilities when condemning 
them for public ownership or when fixing rates to 
be charged the public for their services. However, 
the ascertainment of these rates of per cent will be 
difficult until reliable data on which to base such 
figures have been accumulated and analyzed. Pend- 
ing sufficient experience in this line, the appraise- 
ments of this item of "initial overhead cost" should 
be liberal towards the owner whose property is 
being condemned. 



14 



THE COMING LAND POLICY 



"Initial overhead" in the development of farms 
is a real item of cost and can readily be accounted 
for as it accrues in each individual case; but, be- 
cause of the extreme variableness of farm opera- 
tions from one time to another and the great dif- 
ferences in cost of development on this account, fair 
averages must be employed in the appraisement of 
this item when fixing the value of a settlement farm 
for purposes of condemnation or sale. 

Since average "initial overhead" for any given 
class of farm is, practically speaking, a certain 
percentage of the value of existing private improve- 
ments (that is, those that are necessary or desirable 
for the operation of the farm) , and, as it is a neces- 
sary and unavoidable expense pending the con- 
struction of these improvements and pending the 
opportunity to use them adequately, such "initial 
overhead" might fairly be regarded as a legitimate 
part of their cost. However, for practical reasons 
Initial Overhead Cost should be treated as a distinct 
item. 

Special Features, 

Scenery, social surroundings or other special 
features possessed by any Settlement Farm, some 
or all of which might in certain cases be suffi- 
ciently prized by purchasers to yield a considerable 
bonus, should not be given any value in case of re- 
purchase of the farm by the public. As a general 
rule the original settler is not supposed to pay 
much, if anything, on account of such features when 
he purchases a Settlement Farm from the State, 
and whatever he may thus pay is, as already shown, 
included and disposed of in the raw land item of 
the farm. As soon as the law providing for a maxi- 
mum legal selling price is passed, the Public should 



THE COMING LAND POLICY 15 

be generally informed that Special Features will 
not bring a price when condemnation proceedings 
are instituted against property. This would be a 
notice to any successor of original purchasers from 
the State that whatever he may pay for or on ac- 
count of special features will be at his own risk. 

Site Value. 

Prices paid by the Settlement Board for tracts 
of land for subdivision will probably never include 
more than a moderate amount for sheer site value 
and for special features. Therefore, to simplify the 
subject these amounts thus paid by the Board are 
included in the value fixed in this book for the raw 
land. The money value covering all such economic 
and social advantages that accrue to the farm (on 
account of its location) after the purchase of the 
land for subdivision purposes by the State, meaning 
site value in its exact sense, would include the 
value of most "special features" ; but the latter are 
not included here, the purpose being to keep a 
separate account of the cost of each of these fea- 
tures, so far as any may bring a price in cases of 
sale between private interests. Except so far as 
the Land Settlement Board may have paid extra 
amounts for undeveloped settlement land on ac- 
count of location, or special features, which 
amounts, as already shown, I include in the item 
"Raw Land", nothing should be allowed for site 
value or special features when the public repur- 
chases any of its former Settlement Lands. That 
is to say, as here treated the site value and the 
special features value that may have developed up 
to the time when the State acquired this land is 
covered by the item Raw Land, while site value and 



16 



THE COMING LAND POLICY 



special features value which may have evolved later 
are separately treated under their respective titles. 

Simplifying the Task. 

The State Land Settlement Board will probably 
be equipped with a department to assume general 
supervision over the price-fixing of farms. In or- 
der to meet contingencies that might arise in vexa- 
tious cases of condemnation, it might be desirable 
to provide that the award payable by the State shall 
in no case of this kind exceed an amount deter- 
mined as follows: Let a qualified body of men ob- 
tain options on three nearby available farms se- 
lected and appraised by them as individually worth 
several percent more to the owner of the farm than 
the property being condemned. Then let the Court 
take the highest of the three options as the 
maximum figure over which the condemnation 
award may not go. These three farms should be thus 
held under option by this selected body of men, in 
order that the farmer may have an opportunity to 
exercise his choice between them and purchase the 
one that satisfiies him best, if the award has been 
sufficient, provided he prefers to do this rather 
than retain the cash awarded him through con- 
demnation proceedings. This arrangement would 
often simplify such condemnation proceedings. 



THE COMING LAND POLICY 17 

1921 

SECOND STEP. 

PART B. 

(Maximum Legal Selling Price of Farms in Trans- 
actions between Private Interests.) 

Part B of this step should be introduced about 
the same time as Part A. The object is to determine 
and put into effect as nearly as practicable a maxi- 
mum legal selling price for any State Settlement 
Farm in cases of sale between private persons or 
interests. This price would have to equal the 
money value of: 

a. Raw land (including appurtenant public im- 

provements paid prior to purchase of the 
land by the State). 

b. Appurtenant general public improvements 

(paid subsequent to the original purchase 
of the raw land by the State) . 

c. Appurtenant special public improvements 

(paid subsequent to the original purchase 
of the raw land by the State) . 

d. Private improvements (including growing 

crops). 

e. Excess payment on private improvements. 

f . Initial overhead cost. 

g. Excess payments on initial overhead cost, 
h. Special features, such as give but little, if 

any, economic advantage. 
The maximum legal selling price, however, must 
not include anything for site value (the supposed 
money value of any appreciable economic advan- 
tage due to location or other causes) . 



18 THE COMING LAND POLICY 

Explanation Regarding Above Values. 

The value of raw land, general public improve- 
ments, special public improvements, private im- 
provements and initial overhead cost must be the 
same in amount as in cases of condemnation of the 
farm by the Public. These amounts will be ascer- 
tainable mostly from public records. 

Pending a period of practical experience in the 
matter, excess payments on private improvements 
might be considered permissible when the pur- 
chaser believes that this item in a particular in- 
stance has such excess in value for him, and is 
ready to accept the risk of loss involved in case 
of condemnation suit by the Public. The same re- 
marks apply to excess payments on initial over- 
head cost. Similarly the special features defined 
above, which may be possessed by any Settlement 
Farm, could be allowed to bring a price in case of 
sale between private parties. But, later on, if it 
seems necessary to neutralize partially any profits 
derived from these excess payments and payments 
for special features, these profits can be given spe- 
cial treatment through a branch of the Income Tax 
employed as a "limited remedial tax". But this 
method of remedying an economic fault is defective 
and should be used only until a more logical 
method becomes available. 

No part of the price paid for a Settlement Farm 
should represent so-called site value or other form 
of economic advantage possessed by some farms 
over others. As explained later, these advantages 
should be approximately equalized by other means 
than by an extra sum paid to the owner for the 
land, or by rent paid to him for the use of the 
land, or by taxes thereon paid to the Public. Those 



THE COMING LAND POLICY 19 

methods should be superseded by better ones in 
Settlement Districts as soon as possible and should 
be elsewhere eliminated persistently and gradually. 

Special Cases. 

Sales of Settlement Farms between private par- 
ties at less than maximum legal selling price, or of 
such farms sold in trade for other property, present 
problems but slightly different from those already 
treated and need no special discussion here. 
Laws to Enforce Maximum Legal 
Prices of Settlement Farms. 

The second step of the land policy must include 
the development and application of the necessary 
laws to prevent as far as possible prices on Settle- 
ment Land that exceed the maximum legal figure, 
thus practically excluding compensation for loca- 
tion or site-value. Mere suppression of the selling 
price of site-value would still leave the question 
of economic rent for the future to solve. The farm 
owner who operates his own property has the 
benefit of any and all economic rents that may ac- 
crue to his farm. Of course, in this case he does 
not receive rent from a tenant for the use of the 
land, but he gets the benefit of this rent through 
the products that he sells. To finally eliminate 
such economic rent the law governing the selling 
price of Settlement Farms must be accompanied by 
radical laws for economic rural planning and cer- 
tain economic laws — especially those governing 
prices of commodities. (See Footnote). No so- 
cial system can ever be wholly just until economic 

FOOTNOTE: By economic rural planning I mean 
such arrangement and development of rural districts as 
tend toward equalizing the economic value of all farm 
units, i. e., of each maximum tax-free parcel of land, 
referred to more fully under the Sixth Step of the "Com- 
ing Land Policy". 



20 THE COMING LAND POLICY 

rent is entirely eliminated, i. e., made non-existent. 
This must not be done by eliminating the special 
benefits that cause this rent, but through making 
these benefits general or universal as far as pos- 
sible. It is doubtless true that the enforcement of 
an act fixing the price of Settlement Farms will 
evoke subterfuges to block its application for a 
considerable time, as is the case with most restric- 
tive economic laws. For instance, a well-to-do 
farmer, in order to purchase a tract of land, might 
offer more, ostensibly because of its scenic en- 
virons, than he would ordinarily pay for a benefit 
of this kind, while his hidden purpose might be 
the acquisition of certain present or possible future 
economic advantages in location. It is this specu- 
lating in the special economic benefit of location 
within the limits of Farm Settlement areas that the 
legal price-fixing of farm land, with certain sup- 
porting measures, is meant to check. On the other 
hand, a farmer may be willing to pay for a farm 
more than it is really worth, not for speculative rea- 
sons at all, but solely for its scenery or its proxim- 
ity to the home of certain relatives or friends, etc. 
It does seem that a lover of nature's beauties or a 
man fond of the proximity of friends or other such 
pleasures ought not to be barred from purchasing a 
site possessing such features if he is financially able 
and willing to do so, even if he be required to pay 
an extra price on account of them. The problem is 
how to prevent the use of subterfuges as an aid in 
speculating in location or site-value. 

FIVE CHECKS TO SPECULATION 

However, for apparent reasons, in dealing with 
private owners nearly all prospective purchasers 
of Settlement Farms will be deterred from offering 



THE COMING LAND POLICY 21 

more for the bare land item of such farms than its 
legally figured selling price. Likewise a prospec- 
tive tenant will find little, if any, incentive to pay 
rent that will allow more than a fair interest on 
the recorded maximum legal selling value of the 
raw land item and other recorded or ascertainable 
legal values constituting in the aggregate the full 
maximum legal selling price of the entire farm. 
The most potent reasons for this would be: 

1. A constant supply. — The State has for sale 
on easy terms equally good farms favorably lo- 
cated in the same or other Land Settlement dis- 
tricts at the cost of the bare land item, improve- 
ments and initial overhead cost. This fact alone 
would in most instances and without legal enact- 
ment prevent better offers being made to private 
owners by prospective purchasers. 

2. Equalization of intrinsic worth. — A public 
policy is quietly and surely developing to make 
our farms, especially Settlement Farms, more equal 
in agricultural productiveness, in availability to 
markets, in social conditions and in other respects. 
This is more fully explained in Appendix Two. It 
is beginning to be felt, if not clearly foreseen, that 
this policy will in time tend to equalize greatly so- 
called site values, and, to the degree in which this 
equalization is gradually effected, speculation in the 
economic values of location will be eliminated au- 
tomatically, regardless of other influences. 

3. Steadying of prices through right to con- 
demn. — Whenever it is clearly in the public inter- 
est to do so, the Public will doubtless reserve the 
right to condemn for private purposes other than 
the one for which the farms arei at the time being 
used, any of the farms it has sold to settlers, as well 



22 THE COMING LAND POLICY 

as the right to condemn them for its own use. The 
reservation of these rights will hold back a pros- 
pective purchaser from offering an amount so large 
for any farm as to be later discounted if the farm 
became involved in a condemnation suit. 

True, it is a relatively rare occurrence for a farm 
to be condemned for public purposes; but it does 
happen and, when it becomes a matter of common 
knowledge that the Public, when acquiring private 
land in Settlement Districts, will pay nothing di- 
rectly or indirectly for true site value, then a pros- 
pective buyer will be greatly influenced in the offers 
he makes a private owner for a farm in such dis- 
tricts. However, since the public will reserve the 
right to condemn Settlement Farms for the pur- 
pose of changing their use not only from private to 
public purposes, but from one kind of private use 
to another — as, for instance, changing a portion of 
a farming district into an urban center or industrial 
district — it will happen more frequently that farm 
lands will be condemned by the Public. Under 
these circumstances the greater the chance or like- 
lihood of condemnation the more certain will be 
the individual, who purchases Settlement Land 
from any owner other than the State, to arrive at 
the amount of his offer by the method established 
for condemnation by the Public, which would be 
the maximum legal selling price. On account of 
this alone the opportunity for speculation would be 
greatly reduced, 

4. Keeping public records to give assistance. — 
The assessor will keep a public record revised from 
year to year, as he now does, showing individual 
properties and their respective owners. Annually 
he will also determine and record the maximum 
legal selling price of raw land, of private improve- 



THE COMING LAND POLICY 23 

ments on each Settlement Farm, of the propor- 
tional part of the general and special public im- 
provements appertaining to it, and of initial over- 
head costs. The assessor, after every sale of a Set- 
tlement Farm, should also make a record of any 
amounts that may have been paid for: a, excess 
payments on private improvements; b, excess pay- 
ments for initial overhead cost; c, special features. 
The amounts of these three latter items he would 
naturally obtain without delay from copies of deeds 
in the County Records. All this would be of value 
for income and other tax purposes. 

Such a public record will have a compelling in- 
fluence in checking speculation in site values. And, 
if the assessor will keep a yearly record of the 
actual cost of the private improvements on farms, 
as he probably will be required to do, instead of 
the inaccurate records now maintained, and if im- 
mediately in connection with every sale he deter- 
mines and records the actual present value of such 
improvements, the chance for any appreciable 
amount being paid for site value, through pur- 
posely overpaying for private improvements, would 
be still further lessened; for, in the face of such 
records, the purchaser will realize that he may have 
difficulty in obtaining an excess price for the im- 
provements in case of resale. The same thing might 
be said of excess payments for initial overhead ex- 
pense, and also of special features. 

Something akin to the work involved in prepar- 
ing these records has now to be done by the indi- 
vidual farmer for income tax purposes and might 
as well be done through the county assessors in be- 
half of the Federal Government (under its general 
supervision) as soon as they as a class are equipped 
and qualified for starting such records for Settle- 



24 



THE COMING LAND POLICY 



ment Farm Districts. Thus the necessary informa- 
tion would be available and uniform for all kinds 
of tax purposes. 

5. New requirements in farm deeds. — Once the 
public mind is bent on checking speculation in 
Farm Settlement land, the State authorities will re- 
quire publicity in all deeds, and in all valid grants 
of real estate from private owners to private pur- 
chasers the exact amounts paid for the following 
items will have to be stated and sworn to : 

a. Raw land, 

b. General public improvements, 

c. Special public improvements, 

d. Private improvements, 

e. Excess payment on private improvements, 

f. Initial overhead cost. 

g. Excess payment on initial overhead cost, 

h. Such special features (separately listed) as 
give little economic advantage to the 
farm. 

Out of the total price paid for the farm the 
proper amounts will have to be apportioned to each 
of the above enumerated items and thus written into 
the deed; but none of the apportionments for raw 
land, general and special public improvements, 
private improvements and initial overhead cost 
should be in excess of the amount recorded on the 
books of the assessor as the respective values of 
these several items, or parts, of the maximum legal 
selling price of any Settlement Farm. 

If, after entering the proper amounts paid for 
raw land, public and private improvements, and 
initial overhead cost, there still remain a balance in 
the total selling price of the farm, it should be di- 
vided between (1) excess payment for private im- 
provements, if any amount is paid in addition to 



THE COMING LAND POLICY 25 

the value recorded for private improvements by the 
assessor; (2) excess payment, if any, on initial 
overhead cost; (3) special features, if any were 
paid for. The apportionment between these three 
items should show the amounts for each respect- 
ively which have been mutually agreed upon be- 
tween purchaser and seller and which have passed 
between them by way of compensation. 

Reconciling records with the deeds. — At the time 
of sale of any farm the recorded values on the as- 
sessor's books will be as of the last passed annual 
assessment date, and subsequent changes, if any, in 
the values of raw land and public improvements 
will have to be estimated to date by the assessor. 
Like subsequent changes in value of private im- 
provements and initial overhead cost would have 
to be prepared by the owner and adjusted by the 
assessor. These changes thus determined would 
have to be entered on the public records as of the 
date of transfer of the property, in order that they 
may be the same on the assessor's books as in the 
deed. At the next annual assessment the full legal 
machinery, including the usual right to appeal to a 
Board of Equalization, would re-establish the 
values to date in the regular way. 

If animals, implements, supplies, stocks of ma- 
terials, are sold with the farm, a separate state- 
ment covering these items should be filed with the 
assessor. 

The five checks on speculation enumerated above 
would probably suffice for several years. In the 
meantime a more extended law providing adequate 
penalties may be devised to stop virtually all spec- 
ulation that may then still exist along these lines. 

Lightening work in income tax report. — All of 
the records required by the plan would be of value 



THE COMING LAND POLICY 



in connection with the Income Tax, and manipulat- 
ing the figures to avoid or decrease the amount of 
the tax, or indirectly to pay the seller something 
for site-value, would involve unprofitable risk in 
most cases. Furthermore, keeping up these rec- 
ords would tend toward putting farms on a busi- 
ness basis. 

Recording made easy by small beginning. — At 
first this method of keeping account of sales of Set- 
tlement Farms may seem rather complicated, but in 
the course of three or four years it would be car- 
ried out quickly and with comparative ease. Since 
it would be used only in connection with a rela- 
tively small number of Settlement Farms, the au- 
thorities would have ample time to develop an eas- 
ily workable, detailed plan, before the increase in 
the number of these farms is very great. In fact, 
experience with Income Tax blanks for farm opera- 
tions, as issued by the Federal Government in 1919, 
makes the plan here suggested for assessing and 
deeding Settlement Farms seem by comparison very 
simple indeed. 

Good farmers and occupied farms. — One effect 
of establishing a maximum legal selling price for 
the resale of Settlement Farms is that it will become 
unprofitable to hold them idle, there being prac- 
tically no possibility of advance in price of the raw 
land, while public and private improvements ap- 
plying to the farms will deteriorate and lower in 
value. Another advantage lies in the fact that only 
those individuals will buy settlement lands who 
mean to make agriculture, uncombined with pos- 
sible speculative gains from the resale of their land, 
a source of livelihood. A farming community de- 
veloped under the conditions here outlined is bound 
to be well settled by earnest men and women; pro- 



THE COiMING LAND POLICY 27 

duction is sure to be liberal, and the business end 
of farming will prosper better than if the com- 
munity were built up under the present haphazard 
plan. 

1921 

THIRD STEP 

(Unlimited Right to Condemn Private Land) 

Learning How to Solve the Land 
Problem in Cities. 

By 1921 the State authorities should be given the 
right to condemn for any purpose whatever Settle- 
ment Lands or other lands in their vicinity at an 
adequate remuneration. Such a law would enable 
the State to acquire land within or adjacent to Set- 
tlement areas for urban purposes when occasion de- 
manded it, and this land would, of course, be plat- 
ted according to the best rules of city planning, 
each piece when resold by the State being deeded 
for adequate private urban use and for the special 
purpose for which it was reserved. Naturally such 
urban Settlement Lands would be sold subject to a 
maximum legal selling price and a minimum use, 
and in the end they would be made tax-free. This 
would all be provided for as in the case of agricul- 
tural Settlement Lands (steps two, four, five and 
six) . By developing these Land Settlement towns, 
which will certainly spring up, the State will gradu- 
ally learn by experience how to frame laws in de- 
tail for freeing the land from taxation in its cities, 
new and old, in a manner economically advan- 
tageous to the public. The right to condemn land 
for private urban purposes in or adjacent or near to 
Land Settlement projects is, therefore, of vital im- 
portance. 



28 



THE COMING LAND POLICY 



1921—1922. 
FOURTH STEP. 

(Minimum Use of Settlement Land) . 

Soon after the plan of fixing the maximum legal 
selling price is in regular operation, the State 
should enact a law providing for the minimum use 
that any privately owned parcel of Settlement Land 
may be put to without incurring fines or invalidat- 
ing the owner's title to it. Because the owner will 
then no longer have any assurance of a speculative 
gain through increase in the price of his land he 
will undoubtedly regard himself as a loser every 
day he cannot or does not use it profitably. For 
this reason, the law fixing the minimum use should 
not be stringent. Indeed, it should be so sparing 
with its penalties that an owner, who for any rea- 
son wishes to sell or otherwise dispose of his farm, 
may have ample time to do so without being com- 
pelled to suffer any material loss through fines, or 
being in the meantime obliged to put it to greater 
use than is profitable for him. Of course, until the 
present land tax is discarded, that in itself will act 
as a more than sufficient penalty under the new 
conditions. 

However, should any owner neglect his land in 
a manner really detrimental to the public interest, 
he will have to be punished accordingly. In disputed 
cases, the question of guilt and penalty should be 
decided possibly by special land courts with juries 
composed of farmers, who would be in position to 
sympathize better with the supposedly neglectful 
owner, if he deserved such sympathy. 



THE COMING LAND POLICY 29 

1925-1930. 

FIFTH STEP 

(Introduction of Tax on Individual Incomes De- 
rived from Settlement Lands). 

Necessity for land tax ended. — Because land spec- 
ulation in Settlement Farms will be greatly checked, 
and because the "economic" rent of the land in 
these farms will be largely neutralized wherever the 
preceding steps are well establishd, it will no long- 
er be essential that public funds be raised by means 
of taxes on agricultural land and its improvements 
located within the limits of Land Settlement com- 
munities. When desired, such taxes may be super- 
seded within the limits of these Land Settlements 
by the individual income tax on all incomes (in 
excess of the legal exemption) derived from the 
land. This will constitute the "fifth step" which 
might be taken some time between 1925 and 1930. 
However, taxes on excess-land holdings described 
under "Step Six" must be continued. 

Haste not important. — With the first four steps 
of the coming land policy in full operation, the ob- 
ject of immediate importance, that is, cessation of 
speculation in Settlement. Lands, will largely have 
been accomplished, and the fifth step, or the change 
from real estate taxes to the individual income tax, 
in these Settlement communities can be delayed a 
reasonable length of time, as above suggested, with- 
out ultimate injury to the plan of untaxing the 
land. It can even be postponed until the individual 
income tax becomes general as the principal source 
of public revenues throughout the State, meaning 
State, county, district and urban revenues, as well 
as Federal. 



30 THE COMING LAND POLICY 

Making the tax optional. — If, before the income 
tax becomes general as a main source of revenue 
for State and lesser political subdivisions, these 
communities care to introduce a tax on the incomes 
derived from land as a substitute for all local taxes 
on land and improvements, the people will have to 
vote an amendment to the State constitution cover- 
ing this procedure in Settlement districts. At first 
it may in addition be necessary to provide for this 
change in taxation through a clause in the deeds 
given to the settler by the State. The law might 
provide that the citizens of any Land Settlement 
project, or district, may vote to substitute a tax on 
income derived from land to take the place of ex- 
isting taxes on land and improvements. 

Grand aggregate total of the tax. — Until the reg- 
ular income tax is employed for State and lesser 
purposes and is applied to individual incomes 
throughout the State, the aggregate sum to be 
raised in any year for state, county and district pur- 
poses within each settlement district respectively by 
means of the suggested income tax on profits de- 
rived from the land, should, of course, be an 
amount as equitable as conditions will permit. 
Doubtless the most feasible amount would be a sum 
as nearly equal as possible to the aggregate total 
of all taxes which would be assessed in that year 
against land and improvements located within the 
Settlement areas, provided taxes were to be levied 
there by the same plan or method employed in the 
State at large. Naturally, as soon as the State as a 
whole abandons taxes on land (other than those on 
excess-land holdings) and its improvements, sub- 
stituting some other form of assessment, the latter 
would be made to apply as well to State Land Set- 



THE COMING LAND POLICY 31 

tlement territory, thus superseding whatever form 
of income tax might at the time be current there. 

Points on applying tax. — For purposes of uni- 
formity as between the different districts and for 
reasons of efficiency and economy, any such income 
tax for local application within the several Land 
Settlement projects would have to be assessed and 
collected under the supervision of the State. Pend- 
ing the adoption of a general state income tax, if a 
tax on incomes from farms were adopted in Land 
Settlement districts, farms held vacant unnecessar- 
ily, and producing no incomes, might in certain 
cases have to be assessed an amount equal to 
the average tax on profits derived from similar 
farms that are being operated. Also for practical 
reasons, until the regular income tax is applied 
throughout the entire State to supersede taxes on 
land (except excess holdings) and improvements, 
this local tax on incomes derived from the farming 
of Settlement Land would have to be levied at a 
uniform or so-called normal rate percent, regardless 
of the size of income ; for it is quite certain that any 
surtax, or "additional" tax involving higher rates 
on the larger incomes would tend to lead those ex- 
pecting to earn more liberal incomes than the aver- 
age to locate outside of Settlement Land districts 
where their property would for the present at least 
be assessed in the old way. 

Three good reasons. — There are three reasons for 
substituting the individual income tax for the tax 
on Settlement Farm land and improvements: 1, it 
makes such land more nearly free; 2, the less the 
farmer's income for any year, the smaller his tax; 
3, it is a beginning in Untaxing the Consumer. 

Income tax versus land, tax. — A partial analysis 
of the income tax, to show who pays it, is a very 



32 THE COMING LAND POLICY 

complex problem; nevertheless I expect to treat the 
subject in another supplement as viewed from the 
taxpayers' angle. For the present let it suffice to 
say that the difference to the consumer between the 
tax on individual incomes and that on land is 
fundamental. This difference is due largely not 
only to the normal part of the income tax, but to the 
exemptions, the surtax, and indirectly the excess 
profits tax. Likewise it is due in a measure to the 
fact that incomes are earned at least partially, mak- 
ing them to this extent a part of the true cost of 
production, and to the further fact that the income 
tax is practically universal and, therefore, more 
general than the land tax in its direct application. 
But the individual income tax on incomes derived 
from strictly farming operations, as here proposed, 
does not relieve the consumer as much as will the 
regular individual income tax. However, the for- 
mer is a step in advance of our present mode of 
taxation, pending the time when the regular in- 
come tax becomes universal and a substitute for the 
land tax at least. 

1925-1930. 

SIXTH STEP. 

(Fixing Maximum Size of Tax-free Parcels of Land 
and Amount of Taxes on Excess Holdings). 

This step must be introduced simultaneously with 
the fifth. It fixes by law the maximum size of tax- 
free allotments of land to be allowed any single oc- 
cupant for any particular purpose under given con- 
ditions, and it establishes by law the progressive 
rates of taxation on any available additional or 
excess land deeded the occupant. The extent of 
these free allotments, also of the excess holdings, is 



THE COMING LAND POLICY 33 

to be governed by the good of society in general. 
These various areas will have to be fixed roughly 
at first until a system of applicable records, based 
on experience, has been devised, installed and de- 
veloped. Deeds given by the state for excess hold- 
ings will convey a more limited ownership than 
deeds given for tax-free holdings. But the former 
should be assignable as well as the latter. The 
right to own and use any certain piece of land as 
an excess holding will, of course, depend not only 
on the payment of the annual taxes, but also on the 
demand and need for such land by other settlers as 
a tax-free holding. Furthermore the degree or in- 
tensity of use to which an excess holding is being 
put will necessarily have to be taken into account 
before it is reduced or altogether withdrawn from 
the excess-land owner, and proper compensation 
must be given him for any loss he may sustain. 
This tax on excess holding can, of course, never be 
superseded by any other form of taxation, and it 
must be merely nominal in Settlements where an 
excess of idle land may prevail. The law must 
protect the excess-land owner fully to assure him 
of the fruits of his labor. Regulative laws for ex- 
cess as well as tax-free holdings can be developed 
more easily and more thoroughly under conditions 
as they exist in Land Settlements than under any 
other circumstances. 

Now, according to the use to be made of it, a tax- 
free holding should be as large as a good farmer 
can handle with a specified number of em- 
ployees. As the plan of determining the size of 
these allotments becomes better perfected and 
standardized the size of his family and other cir- 
cumstances may be taken into account in fixing the 
limits of such allotments. Eventually productive 



34 



THE COMING LAND POLICY 



results from year to year must also figure in de- 
termining the size of these allotments. 

The same general principles regarding taxation 
must be applied to land owned by farming corpora- 
tions, but to cover land under such ownership the 
law will have to provide special rules for deter- 
mining the area of tax-free holdings and for ascer- 
taining the rate of taxation on excess holdings. 



1920-1930. 

SEVENTH STEP. 

(Price Regulation of Essential Agricultural 
Products). 

Much of the benefit that should accrue to the 
farmer and to society from the application of the 
six foregoing steps may be neutralized if selling 
prices of essential agricultural products are not 
established from time to time by the public on a 
basis fair to all concerned. This benefit will also go 
amiss if the middleman is not eliminated whenever 
he serves an insufficiently useful purpose in ex- 
change for the commission he receives. It will be 
an easy matter to fix and regulate prices on es- 
sential agricultural products once the forward 
movements in the field of husbandry, mentioned 
in Appendix Two, are well under way. It is esti- 
mated that between the years 1920 and 1930 price 
regulation of the most essential agricultural prod- 
ucts can safely be established throughout the 
United States for the benefit of both the farmer 
and the Public. As time goes on, this regulation 
can be extended and made more scientific and exact, 
especially when agricultural products are sold more 
and more collectively on a state-wide scale. 



THE COMING LAND POLICY 35 

1930-1980. 

EIGHTH STEP. 

(Eliminating the Items of Raw Land and General 
Public Improvements). 

Artificially imposed obstacles. — As stated in "Un- 
taxing the Consumer", the Raw Land item of farms 
should gradually he made practically free of price. 
One reason for this is that the young farmer of the 
future, and his wife, may start life without arti- 
ficially imposed obstacles that are or should be for- 
eign to the business of farming; for, without un- 
hampered agricultural activity, race vitality of the 
highest type cannot be developed and maintained. 
This does not mean that agriculture as a business 
occupation should not pay every just expense in- 
cident to its operation, however. 

Free Farm Land. 

With definite maximum legal selling prices es- 
tablished for the land of any Settlement Farm, 
meaning farm land as it was when bought in a rela- 
tively raw or undeveloped condition by the Settle- 
ment Board, the State might between 1930 and 
1980, when it is older and richer, annually purchase, 
say, a two percent undivided interest in the Raw 
Land item of each Settlement Farm without acquir- 
ing any proprietory rights over the improvements 
in or upon the land, such as buildings, drains, level- 
ing, enhanced fertility, etc., or any rights in the in- 
come derived from it. 

Getting rid of price of general public improve- 
ments. — In the same manner, also beginning with 
the year 1930, the amount included in the maxi- 
mum legal selling price of the farm for general 



36 THE COMING LAND POLICY 

public improvements should be paid back to the 
farm-owner by the State in like annual installments. 
In that year the General Public Improvement item 
might be added to that of Raw Land. The con- 
solidated amount should then be liquidated at a 
uniform rate per annum, ending not later than 1980. 
After 1930 no further tax payments made for gen- 
eral public improvements should enter into the 
maximum legal selling price of farms. The item 
Special Public Improvements, covering such im- 
provements as have been paid by special assess- 
ments on the farm, should continue to be a part of 
the maximum legal selling price of the farm. 

Annual reduction in price of farm. — Then the 
maximum legal selling price of the Raw Land item, 
as thus augmented by the General Public Improve- 
ment item of each farm, will be reduced just so 
much each year between seller and purchaser. In 
time there would remain no part of the selling price 
of the farm to cover raw land or appurtenant gen- 
eral public improvements. Settlement farms sold 
by the Board after 1930 will have to be given 
slightly different treatment in regard to the two 
per cent annual refund. In these cases their selling 
price should be discounted or rebated in an amount 
equal to two per cent per annum between 1930 and 
the year of sale, on the combined total of the raw 
land and the general public improvement items of 
the farm. This discount should be regarded as cov- 
ering just so many accumulated annual refund in- 
stallments of the past, but paid now by the State in 
one lump sum, i. e., at time of sale to the settler. 
As the yearly refund installments are to be met by 
the State, so will it have to bear this accumulated 
discount. This will be necessary, in order that the 
last of the two per cent refund installments may be 



THE COMING LAND POLICY 37 

paid off to the land owner on all farms in the same 
year, namely, 1980. 

Private ownership still. — Notwithstanding the 
full payment of these refund installments and the 
discount just referred to, a man's ownership in his 
farm will continue indefinitely, subject to condi- 
tions prescribed by law, and, when he or his heirs 
or other successors sell out, he or they will be en- 
titled to receive payment only for the value of pri- 
vate improvements in and upon the land, together 
with the proportional part of special public im- 
provements appurtaining to it, growing crops and 
initial overhead cost. In some cases of sale to pri- 
vate parties he may be remunerated for the value 
of special features and for excess on private im- 
provements and on initial overhead cost, — pro- 
vided the purchaser be willing to pay so much. 
Then farm land would be as free as it can be 
made, and in the meantime, once the State Land 
Settlement Board can supply all the new farms for 
which there is any demand, agricultural land will 
be comparatively free. 

19301950. 

NINTH STEP. 

(Placing All Agricultural Land under the Farm 
Settlement Plan). 

The eight preceding steps apply to State Settle- 
ment farm lands, also in a suitably modified way 
to urban land connected with the Settlements, pro- 
vided any such urban centers develop, as suggested 
under the Third Step. 

It will not be many years before the State Settle- 
ment Board w T ill be given permanent control over 



38 THE COMING LAND POLICY 

all settlement lands, and I foresee conditions which 
after 1930 will lead owners of agricultural land 
located outside of these settlements to request that 
their property be placed under the jurisdiction of 
the Board and subjected to regulations identical 
with those governing land in the State Settlements. 
By 1950 practically all farm lands of the state, 
both in and outside of the settlements, will be under 
supervision of the State Land Settlement Board and 
will be governed through the best land laws it is 
possible to devise. In relatively few cases a modi- 
fied type of condemnation or other legal proceed- 
ings will be required to complete the work, giving 
us a new single land policy based on free land, that 
is, untaxed land. 

1920-1950 

THE MOST IMPORTANT STEP. 

(A Land Problem Commission). 

Of course, instead of taking the steps numbered 
two to nine inclusive, it would be necessary only 
to create a Land Problem Commission, composed 
of men honest, straightforward, well versed in so- 
cial science and professionally the best in their train- 
ing the country can produce. Such a body of men 
will properly plan all necessary steps and by first 
creating an intelligent, powerful public opinion in 
favor of their plans they will see that these steps 
are taken. In fact, a wise selection of the members 
of this Commission will be by far the most impor- 
tant factor in solving the land question. With ade- 
quate working equipment and sufficient means, 
such a commission could survey the land problem 
of the world at large and thus acquire all the ex- 



THE COMING LAND POLICY 39 

perience obtainable through observation and study. 
In this way many false steps will be saved and 
progress will be more quickly and economically ef- 
fected. With the co-operation of the various State 
Land Settlement Boards that are bound to be in- 
augurated, such a Commission would naturally de- 
velop a land policy that would be practicable in its 
main features as soon as formulated. The great 
question in this connection is: v/hat man or body 
of men, with the authority to appoint such a com- 
mission, has both the capacity to do so and the 
political power to keep their appointees in office, 
protecting them against excessive harrassment? 

1920-1950 
CONTEMPORARY STEPS. 

(Obtaining Public Control over Our Other Natural 

Resources) . 
The General Survey. 

A survey of all our other natural resources and 
the activities closely connected with them should be 
started immediately, and continued contemporane- 
ously with the preceding steps by a special Com- 
mission. The later should also develop a plan or 
program that will gradually place all natural re- 
sources by 1950 or 1960 in the care of the Public 
for public operation. This survey would neces- 
sarily prescribe what the public should do within 
a very few years to prepare a sufficient number 
of public servants adequately to operate our electric 
power plants and distributing systems; also what 
it should do through secondary schools and colleges 
to make itself highly fit in proper time to carry on 
public ownership and operation of all natural re- 
sources. 



40 THE COMING LAND POLICY 

The economic program covering these natural re- 
sources should allow at least four or five years 
for the survey and formulation of a clear and spe- 
cific outline plan extending thirty to forty years 
into the future. A conservative time schedule for 
the accomplishment of such steps as the Commis- 
sion may outline for carrying out the entire plan 
should be adopted and followed as closely as prac- 
ticable. 

Water Power the Next to Be Socialized. 

The ownership and operation of water power 
should be as completely socialized as is domestic 
water. The survey covering this item need not re- 
quire over two years, at which time active steps 
should be taken to accomplish public ownership of 
all of it within two decades. Beginning in two 
years, private power plants, one after another, 
should be taken over by our cities as rapidly as the 
political capacity of the public is sufficiently de- 
veloped to permit of their operation by the people, 
and new plants should be built by the Public as re- 
quired. It will be found that as soon as public 
ownership of water power is irrevocably estab- 
lished, our colleges, and business interests espe- 
cially, will strive to make its operation more suc- 
cessful than public ownership of domestic water is 
at present. Even our most conservative politicians 
will see the desirability of furthering the interests 
of such a policy. One reason for this is that no 
private interest in particular will any longer profit 
directly by the power business, and all interests, 
large and small, will have use for electric power, 
will want it at the lowest reasonable rate and will 
demand the best service. 



THE COMING LAND POLICY 41 

Water power should be the next natural resource 
acquired and operated by the public. Because it is 
still to a great extent in possession of the govern- 
ment, it would require the least outlay of money to 
"recapture" what private interests have already 
acquired, and it is the easiest of all, except domestic 
water, to operate, making it particularly adaptable 
to public ownership. Again, it is destined to be 
the most fundamental and important of all natural 
resources^ barring, of course, domestic water and 
rural and urban land. 

Coal and Iron Mines. 

The plan for general public ownership and op- 
eration of coal mines by qualified cities and states 
should provide for an actual beginning within five 
years in operating a few on a moderate scale in 
some favorable locality, and for accomplishing 
their acquisition throughout the nation in twenty- 
five years, unless conditions warrant more rapid 
progress. In the same manner, the Public should 
gradually control and produce all the iron ore and 
all other common metals of the country within 
thirty or forty years. Notwithstanding some shirk- 
ing and inefficiency within public ownership en- 
terprises, and the scheming opposition of certain 
corporation interests, this will and must be done 
until public ownership of our vital natural re- 
sources is an accomplished fact. It would be a great 
gain for both Business and the Public if the former 
were to lend substantial aid in qualifying the Pub- 
lic to manage these resources successfully. 

A Time Schedule for Each Natural Resource. 

The plans for carrying out the scheme must in 
general terms conservatively prescribe how much 



42 THE COMING LAND POLICY 

is to be completed by the end, say, of each five- 
year period, so that those most interested may 
know whether progress is keeping up with the 
time schedule. If the schedule is approximately 
carried out, it will insure enthusiastic support of 
the public ; for it will show that the authorities are 
bent on fulfilling their promises, to meet which will 
mean. — 1, that the people will be supplied with 
natural resources, such as water, power, coal, com- 
mon ores, etc., at cost; i. e., the full cost of produc- 
tion without any price being added for the unde- 
veloped resources in their natural state; 2, that un- 
necessary private accumulation of wealth out of 
business that the Public is fully capable of carry- 
ing on for itself will be prevented; 3, that certain 
private "business" will be eliminated from politics ; 
4, that through experience gained in the operation 
of public utilities, the people will become better 
qualified to conduct public business generally, — for 
it has been found that a certain amount of stand- 
ardized utility business conducted by a community 
is in time likely to round out and improve the en- 
tire public service of that community; 5, that free 
opportunity will be given those to do so who wish to 
enlighten themselves in full detail regarding the 
operation of industrial business. The public- 
owned utility will give this opportunity of enlight- 
enment, from which the people as a body have 
been excluded heretofore. 



THE COMING LAND POLICY 43 

TIME TABLE CONDENSED 

1919 
THE FIRST STEP 

(Farm Land Settlement). 

The State of California through its Land Settle- 
ment Board is buying, platting and improving ag- 
ricultural land and selling it to actual settlers. The 
Board and other governmental agencies are dis- 
seminating agricultural knowledge and are in many 
other ways improving rural conditions, to insure 
the success of colonization. This will probably be 
continued indefinitely. The State Land Settlement 
Board of California has now (1919) taken the first 
decisive step towards the Coming Land Policy, i. e., 
it has undertaken land settlement work in agricul- 
tural districts under a thorough plan and on an ex- 
tensive scale (see page 6) . 

1921 

THE SECOND STEP. 

(Determining Maximum Legal Selling Prices). 

The plan of establishing a maximum legal sell- 
ing price for the raw land involved in the sale of 
Settlement Farms should be put into practice not 
later than 1921, the object being to check, if not to 
stop, speculation in settlement land, or rather in its 
location. An appropriate clause in the deed from 
the State might suffice to begin with. Before it is 
practicable to do this, however, accounting meth- 
ods or plans must be prepared for the assessor, to 
assist him in keeping the correct cost records of 



44 THE COMING LAND POLICY 

these various properties in conjunction with his as- 
sessment records. The selling price of Settlement 
Farms purchased before this provision is put into 
effect would, of course, have no maximum legal 
limit, except in cases where the owners voluntarily 
placed their property under the law governing this 
maximum limit. (See page 6). 

1921 

THE THIRD STEP. 

(State Authorities to Be Given Right to Condemn 

Settlement Land and Land Adjacent to It 

for Urban Purposes). 

The Farm Settlement Board should be enabled 
to enlarge any settlement town that may develop, 
or to start a new one on the special lines already 
referred to, by making use of land acquired for 
the purpose through condemnation proceedings or 
otherwise, either within the Settlement district or 
adjacent to or near it. This law should not be 
enacted later than 1921. (See page 27). 

1921-1922 

THE FOURTH STEP 

(A Provision for Minimum Use of Settlement 
Land). 

A law covering minimum use of Settlement 
Farms should be passed not later than 1922 and 
put into force within one year thereafter. So long 
as there is plenty of good agricultural land in the 
State, this would be a simple law to frame and an 
easy one to apply. (See page 28). 



THE COMING LAND POLICY 45 

1925-1930 
THE FIFTH STEP. 

(Introducing the Tax on Income Derived from 
Land in State Land Settlement Districts.) 
This step has its advantages and may be intro- 
duced some time between 1925 and 1930, unless 
at an earlier date the State as a whole adopts the 
income or any other tax to supersede the tax on 
land and improvements, as the principal source of 
public funds. It does not seem likely, however, 
that this will take place so soon. (See page 29) . 

1925-1930 

THE SIXTH STEP. 

(Fixing Maximum Sizes of Tax-free Parcels of 
Land in Farm Land Settlement Projects and 
Determining the Various Rates of Assess- 
ment to Be Levied on Excess Holdings.) 
This proposition must be undertaken simultane- 
ously with the Fourth Step. The Fifth and part of 
the Sixth step form a unit in the ultimate efforts to 
make farm lands free and place the farmer in a 
position of greater safety. (See page 32.) 

1920-1930 
SEVENTH STEP 

(Regulation of Prices of Leading Agricultural 
Products.) 
This can be done gradually, but only as the busi- 
ness of agriculture becomes better standardized 
and collective selling of farm products becomes 
more common. The greatest activity along this line 
could profitably take place between 1920 and 1930. 
(See page 34. 



46 THE COMING LAND POLICY 

1930-1980 

EIGHTH STEP 

(Elimination of the Value of Raw Land and of 

General Public Improvements from the Price 

of State Land Settlement Farms.) 

The idea is to have the State as a whole, be- 
tween the years 1930 and 1980, gradually reim- 
burse the owner of such land by returning an- 
nually at least two per cent of the principal sum 
paid by him for the bare land. After each such 
annual rebate of two percent on the original price 
of the raw land is refunded to whomsoever may at 
the time own the farm, the maximum legal selling 
price of this land will be reduced in like amount, 
so that in fifty years there will be left no part of 
the selling price of the property that applies to raw 
land. 

In theory and quite generally in practice each 
successive owner will then have been fully reim- 
bursed for the amount he himself paid on the raw 
land item of his farm; for each succeeding owner 
pays his predecessor an amount for the raw land 
that equals the sum of the two per cent install- 
ments still to be paid by the State. The interest 
paid on deferred installments of the purchase price 
will have to be regarded as rent for the use of the 
land until such interest terminates forever through 
the last two percent installment, and by 1980 the 
bare land will no longer figure in the maximum 
legal selling price of Settlement Farms. 

Likewise between 1930 and 1980 the value of 
General Public Improvements should also be elim- 
inated gradually from the maximum legal selling 



THE COMING LAND POLICY 47 

price according to the method suggested for the 
item Raw Land. 

By 1930 land will be comparatively free, and 
by 1980 it will be as free as it can be made, pro- 
vided rural planing has been reasonably developed. 
(See page 35.) 

1930-1950 

NINTH STEP. 

(Incorporating Practically All Agricultural Com- 
munities under the State Land Settlement 
Scheme. ) 

Every reasonable encouragement should be given 
owners whose farms are not under control of the 
State Farm Settlement Board to place their farms 
under its jurisdiction, or control, subject to the 
same terms and conditions (except possibly the 
price of the Raw Land item) as the farms which 
were originally sold by the Board. By 1950 this 
control ought; if possible, to be made compulsory 
if the desired result has not already been volun- 
tarily accomplished by the land owners. (See 
page 37.) 

1920-1950 

THE MOST IMPORTANT STEP. 

(The Creation of a "National Land Problem 
Commission".) 

This Commission is to consist of the best men 
available, the idea being to establish it as soon as 
possible and maintain it as long as necessary. 
(See page 38.) 



48 THE COMING LAND POLICY 

1920-1950 
CONTEMPORARY STEPS. 

(A Series of Steps Equivalent to the Ten Foregoing 
Applied to All Other Natural Resources.) 

These steps, applied to Natural Resources, should 
be based on carefully made plans and should be 
prearranged on a time schedule, the object being to 
place the Public by 1950 or 1960 in actual owner- 
ship and operation of all water power, all mines of 
ordinary mineral products, all oil wells and all 
large forest resources. (See page 39.) 



The Possibility of Carrying 
Out the Foregoing. 

When we carefully consider what progress has 
been made in knowledge and organization the 
world over in the lines of industry, business and 
government during the past half century, and the 
momentum that has developed up to the present 
time, what has been suggested here seems possible, 
and, if we can select especially qualified, public- 
spirited men and keep them at making plans for 
actual use covering such important steps as these 
for the nation, a great deal more will be accom- 
plished successfully in a shorter time and without 
any great number of retarding social upheavals. 
But who is able to devise the system that will re- 
sult in the appointment of these men? This ques- 
tion emphasizes the country's great need of a few 
really profound moral and political leaders pos- 
sessed of deep experience and wisdom, — leaders in 






THE COMING LAND POLICY 49 

the Senate and House of Representatives who will 
seek a practical way out of our present dan- 
gerous economic conditions; leaders who can and 
will bravely combat any powers that attempt to 
mislead the Public against its own interests; lead- 
ers who can hold out in this struggle until the peo- 
ple themselves are convinced that the methods they 
propose are sincere and wise, and that they should 
be followed; leaders that can enlist the aid of the 
most able business men and labor representatives 
whose understanding of social questions is broad 
and thorough. We all know that often before a need 
of this kind becomes overwhelming the right men 
are developed. There are indications of this taking 
place in Congress at present. Such men will 
doubtless bring about the right system for the oc- 
casion. If this happens we may look for an era of 
great political and economic progress, particularly 
in our land problem. 



50 THE COMING LAND POLICY 



APPENDIX ONE 

Since beginning the present supplement, it has 
occurred to me that some readers might wonder 
why I have undertaken to write on the subject. I 
feel that my experience, the more outstanding ap- 
plicable features of which are outlined below, has 
given me a familiarity with the citizen land-owner's 
side of the problems covering rent, taxes, farm 
land, city land, prices of commodities and related 
questions. For instance: 

I finished my freshman year in a state agricul- 
tural college in the early eighties, but was required 
elsewhere and, therefore, had to leave college. Pre- 
vious to this I was engaged for five years in a 
small, but lively, retail business and, on returning 
home, again took up the work. I had a personal in- 
terest in this store from its incipiency until it was 
sold out. During this period (twelve years) I had 
the usual experience with a landlord that others 
undergo — increase in rents, renewal of lease, addi- 
tional space, etc. For fifteen years I held a half 
interest m a manufacturing plant from its begin- 
ning until after it had developed into a thriving 
business and had become a well equipped factory. 
This experience, of course, covered the selection 
and purchase of an industrial site, the meeting and 
adjusting of tax assessments on it and on the busi- 
ness, and a study of the effect of price changes on 
consumption and on the safety or security of the 
business. 

Needing a radical change, I bought forty acres 
of rough land in the East and personally attended 



THE COMING LAND POLICY 51 

to all details of planning and construction of dwell- 
ing, work shop, animal stalls, barn, root cellar, 
sewerage, drainage tiling, well drilling, etc. I then 
moved to Southern California, leaving the property 
in the care of a manager, to be developed into a 
small model farm and orchard; but I still kept a 
detailed account of the agricultural and other ex- 
penses connected with it. After holding it for fif- 
teen years, I sold it. 

During a period of seventeen years I paid a man- 
ager for developing twenty acres of raw land into 
an English walnut grove of choice, full-bearing 
trees, and the detailed account of this property I 
carefully interpreted as part of my study of wal- 
nut growing and selling. 

For ten years or more I held a half interest in 
three other walnut groves, three orange ranches and 
one lemon ranch. These places were developed and 
operated by a manager, until sold. For a period of 
five years I had a half interest in a grain ranch, 
and also owned a half interest in several thousand 
acres of grazing land, renting it out. I now own a 
half interest in two hundred acres of fine farm 
land under cultivation on experimental lines. 

I have owned a half interest in a large villa 
tract and several hundred acres of beach resort 
property. For about seventeen years I have held 
a half interest in both centrally located and out- 
lying retail business property, mostly improved, as 
well as a half interest in developed warehouse 
property. My investments and undertakings proved 
moderately profitable as a whole. 

For two years I was responsible for and pre- 
pared municipal budgets and closely observed the 
preparation of tax levies to cover them in a city of 
forty thousand. At the same time I wrote several 



52 THE COMING LAND POLICY 

tax articles, based on the experience involved dur- 
ing this period. One of these appeared in the an- 
nual proceedings of a state league of municipali- 
ties and one in the annual proceedings of a national 
association. For more than six months much of my 
time was spent in appraising and effecting the pur- 
chase by a municipality of a domestic water plant 
worth over a million dollars. Later I spent about 
a month in reviewing the inventory, and consoli- 
dated and re-analyzed six years' accounts, of a mu- 
nicipal electric light plant worth over seven hun- 
dred thousand dollars. I have also been a member 
of two farmers' cooperative marketing associa- 
tions. 

In 1907 and subsequently I was so situated that 
I was enabled to observe Japanese farm laborers at 
close range and noticed particularly their general 
efficiency and their capacity for physical work. 
Aware of the rapid exodus of white men from 
farms to cities, and understanding the powerful 
economic and social reasons for this movement and 
the difficulties in the way of overcoming them, I 
could not fail to see racial troubles ahead that 
would develop into a Japanese question for the 
state of California. Her land problem is insep- 
arable from our Japanese question. In fact the 
latter is for the present the most serious feature of 
her land problem, as the Japanese excel not only 
in physical endurance but in farm management. 

To show that I gave or tried to give the subject 
some orderly thought, I may say that I wrote sev- 
eral articles on the subject, one of which was pub- 
lished in the Twentieth Century Magazine of Bos- 
ton in June. 1910, and the other in the Pacific Out- 
look of Los Angeles, in July, 1913. 



THE COMING LAND POLICY 53 

My observations lead me to believe that a wise 
and very comprehensive land policy will turn the 
white tide back to the farms. It will give us living 
conditions on the farms that will permit white 
farmers to render good and ample economic service 
to the public and still allow them sufficient per- 
sonal leisure to develop a high class of citizenship 
which is essential to the upbuilding of a good 
Democracy. With the general situation thus modi- 
fied the Japanese question will gradually become 
less serious. 

In all of these and other enterprises my position 
usually made it necessary for me to keep informed 
in detail on land prices, rent rates, taxes and prices 
of commodities. My experience, therefore, al- 
though not every extensive, has given me a good 
opportunity to acquire the citizen land-owners' 
point of view on these problems, so far as they 
apply to Southern California where I have lived 
for the past twenty years. The limitations of my 
experience convince me that any man, to become an 
authority in this line, must study the best books on 
agricultural business development and on land and 
other forms of taxation. He must also investigate 
similar problems which may be in existence in 
other parts of the world. To do this thoroughly 
requires long training as a student and an inves- 
tigator, which I am neither in position nor condition 
to acquire. However, this supplement is to be re- 
garded as a ramified question, based on a some- 
what varied, practical experience, and put to the 
trained economist. It is written for the purpose of 
clearing points that greatly perplex a large num- 
ber of citizens. But, to get the full import of the 
question presented, it is necessary to read my small 
book, "Untaxing the Consumer". 



54 THE COMING LAND POLICY 



APPENDIX TWO. 

That part of pages 62, 63 and 64 of Untaxing the 
Consumer, referred to on page 4, is here quoted : 

"Equalizing Economic Opportunity 
in Agriculture. 

"Certain things can be done toward equalizing 
and making more readily comparable the useful- 
ness, or value, of different parcels of agricultural 
land, at the same time increasing their productive- 
ness and availability. In urban communities City 
Planning can be utilized to improve and equalize 
the usefulness, or value, of business, industrial or 
residential sites respectively. The corresponding 
measure of Rural Planning can with like facility be 
used to equalize values of agricultural land. 

"For reasons of necessity and practicability farm- 
ing lands will probably be acted upon first. In- 
deed, a good start has already been made and, as 
soon as the social mind turns its special attention 
to promoting the land and tax problems for the 
general good, steps will be systematically taken to 
equalize the worth of land according to its classi- 
fication, so as not merely to realize immediate re- 
sults, but gradually to equalize economic oppor- 
tunity and to better standardize or socialize what- 
ever agricultural production is essential to life. 

"In a society as complex as it is today it is an 
impossibility for any individual to do any part of 
this for himself, and there is no other way to reach 
economic equity in any field than by collective ac- 
tion, which means ultimately governmental action. 
In different parts of the country there are already 



THE COMING LAND POLICY 55 

started or under contemplation plans to effect im- 
provement in the productive or economic value of 
farms, incidentally making them more uniform in 
value. Some of these steps are: — 

"1. Government distribution of practical and 
scientific agricultural knowledge. 

"2. Government distribution of business knowl- 
edge applicable to farming. 

"3. Co-operation in the ownership and use of 
such things as public irrigating sys- 
tems, jointly operated farming machin- 
ery, etc. 

"4. Co-operation in marketing through state 
departments or mutual marketing asso- 
ciations. 

"5. Co-operative storage — grain elevators, cold 
storage, etc. 

"6. Co-operation in the buying and manufac- 
turing of fertilizers. 

"7. Farm Loan Banks, or "rural credits". 

"8. State Land Settlement systems. 

"9. Transportation of farm products by Par- 
cels Post, motor truck lines owned, co- 
operatively or by the public and, later, 
by government-owned railroads. Gov- 
ernment freight rates at that time will 
probably be partially equalized, in or- 
dei that the cost of shipping to market 
may be as nearly uniform as practicable 
for all farmers in the same marketing 
district. 
"10. Extension of good roads. Such roads re- 
duce the mileage cost of hauling and 
consequently tend to equalize the cost 



56 



THE COMING LAND POLICY 



of transportation by private means, 

making the value of land more nearly 

uniform. 
"11. Rapid increase in the number of secondary 

schools in rural districts, offering good 

agricultural courses. 
"12. Continued advance in agricultural college 

courses. 

"13. University extension work. 

"14. A system of reporting local, as well as 
general, prospective crop and market 
conditions. This will doubtless soon be 
inaugurated, in order that over-pro- 
duction and under-production may be 
moderated and prices steadied. 

"15. Great extension and improvement of the 
present "farm adviser" system, operat- 
ed in connection with universities. 
Through this the farmer is advanced 
in professional and business knowledge 
relating to agriculture. The purpose in 
part is to inform and aid him regard- 
ing: a, the agricultural value of land 
he purchases from the State Settlement 
Board, and the uses to which it can be 
put most profitably; b, what the crop 
requirements are likely to be for the 
following season (in this connection the 
farmer will also be given such infor- 
mation as will enable him to draw his 
own conclusions in regard to crop con- 
ditions) ; c, the latest discoveries con- 
cerning the care of the crops a farmer 
has planted; d, the latest ways of keep- 
ing records covering the results of his 



THE COMING LAND POLICY 57 

work, in order that the farmer may de- 
termine the value of his efforts and 
strive for better farming methods; e, 
the introduction of collective produc- 
tion to its practical limit; f, co-opera- 
tive marketing associations. 

"Through Farm Advisers much will be done to 
increase the efficiency of agriculturists, to advance 
farming as a profession, to stabilize and otherwise 
improve farming as a business, — all of which will 
tend toward equalizing economic opportunity in 
farming and the intrinsic worth of land for agri- 
cultural purposes, and will also tend toward sim- 
plifying the land problems and the land-tax schemes 
in agricultural districts." 

It is not well or natural that all farmers' sons 
should remain on the farm. On the other hand, as 
they do not remain in sufficient number to supply 
our needed agricultural products, it is necessary 
that special and adequate provision be made for 
young men of the city to enter agricultural pur- 
suits. To this end I consider it desirable that a 
State farm of at least two thousand acres for each 
million of population be made a part of the equip- 
ment of every state agricultural college. This 
farm should be used to give every graduate who so 
desires a plot of ground of five or more acres, to 
operate for his own benefit for a period of one, 
two or three years, immediately after graduating. 
Such a finishing step will counteract the tendency 
of graduates to seek employment in non-agricul- 
tural pursuits and thus prevent drifting perma- 
nently back to the city. This plan, too, if the stu- 
dent be successful, will enable him to effect a sav- 



58 THE COMING LAND POLICY 

ing with which to make a first payment on a State 
Settlement Farm. Should this large college farm be 
operated as a self-governing community under col- 
lege supervision or under the supervision of the 
State Land Settlement Board, and should this com- 
munity be made to function on an ever higher 
economic, political and social plane, it will develop 
citizenship of a kind that every democracy must 
have to be successful. 



THE COMING LAND POLICY 59 



APPENDIX THREE 
Statement of Dr. Spillman 

Dr. W. J. Spillman wag Chief of the Bureau of 
Farm Management in the Department of Agricul- 
ture from 1915 to 1918. Also previous to this date 
— in fact, since 1905 — he was connected with the 
Department in other important capacities. He is 
recognized as an agricultural scientist of high rank. 
His statement, w T hich follows, is a reprint from La 
Follette's Magazine of June, 1919. 

"In the summer of 1917 the President directed 
the Federal Trade Commission to undertake certain 
investigations relating to the production, owner- 
ship, manufacture, storage and distribution of food- 
stuffs. In the presidential letter to the Federal 
Trade Commission he states: 'I shall direct that 
Department (Department of Agriculture) to co- 
operate with you in this enterprise.' The dealings 
of the Federal Trade Commission with the Depart- 
ment of Agriculture were held with the Bureau 
of Markets and it was mutually agreed between the 
Bureau of Markets and the Office of Farm Manage- 
ment that the latter office, because of its long ex- 
perience in cost of production investigations, should 
have charge of this phase of the work. 

"Pursuant to this understanding, the office asked 
for thirteen letters of authorization for the purpose 
of sending men into the field to collect data in ad- 
dition to that which the office had already ac- 



60 



THE COMING LAND POLICY 



cumulated during the ten years' investigation of this 
subject. The principal object sought in this field 
work was to secure accurate information on prices 
of labor, feed, etc. The Secretary of Agriculture 
refused to grant such letters of authorization, and 
called me to his office. This was early in October, 
1917. 

"In the interview which followed he ordered me 
to discontinue the cost of production investigations, 
on the ground that the farmer is not entitled to 
any information on the subject. 'The only use ever 
made of such information,' said the Secretary, 'is 
for agitators like this man Baer of North Dakota 
to go out and stir the farmers up with it.' The 
next day I received from the Secretary of Agri- 
culture an unsigned letter, drawn for his signature, 
sent me ostensibly that I might suggest changes 
in it, beginning as follows: 'According to the 
agreement w£ reached in our conference yesterday 
the following projects in the Office of Farm Man- 
agement will be discontinued.' He then went on to 
enumerate by number every project dealing with 
cost of production. This, of course, put a stop to 
our field work so far as it related to this particular 
investigation. 

Cost of Production of Live Stock. 

"Early in January (1918), Mr. Ed C. Lasater of 
Texas came to my office and asked me the status of 
our cost of production investigations. I told him 
the facts above related. He suggested that he might 
be able to help the situation, and I assured him that 
his help would be appreciated. 

"About the middle of January a telegram was 
received by the Secretary reading substantially as 
follows : 'The American National Live Stock Asso- 



THE COMING LAND POLICY 61 

ciation in session at Salt Lake City desires to know 
the status of the investigation of the cost of produc- 
tion of beef being conducted by your Office of 
Farm Management. Please wire reply in time for 
me to read it to this convention before it adjourns 
tomorrow at 4:30.' This telegram was sent to me 
to prepare a reply for the Secretary's signature. I 
prepared substantially the following: The inves- 
tigations on the cost of production have been 
greatly extended, and are being pushed vigorously. 
A report on them will be ready the first of July.' 

"A few minutes after this telegram had been 
sent to the Secretary's office for his signature, Mr. 
Harrison of the Secretary's office called me over 
the phone and the following conversation, as nearly 
as I can recall it, took place: 'Spillman, what in 
hell do you mean by sending a telegram like this 
over here for the Secretary to sign? You know 
damned well he has stopped all these investiga- 
tions.' I replied that I knew he had ordered them 
stopped, but that I had reason to think he was go- 
ing to order them started again. Mr. Harrison 
asked me what I meant by such a statement, and I 
told him that I meant exactly what the statement 
implied. 

Making a Telegram True. 

"Then Mr. Harrison said: 'The telegram is not 
true.' I replied that it would be true when the 
Secretary signed it. He said the Secretary would 
not sign it, and then I asked him if he knew who 
Ike Pryor is, this being the name of the man who 
had sent the original telegram. Mr. Harrison re- 
plied that all he knew was that Mr. Pryor was 
signed as the president of the association. I then 
remarked that he represented one of the largest 



i 



62 THE COMING LAND POLICY 

and livest bunches of men in the country, and I 
happened to know that these men knew what they 
were after. I requested that he tell the Secretary 
from me that if he valued his job he would sign 
that telegram. Within half an hour I received a 
very courteous note from Mr. Harrison, with a copy 
of the telegram which he said the Secretary had 
signed and sent. 

"The next day I renewed my request for the 
thirteen letters of authorization, and the request 
was granted, but this was in the dead of winter and 
it was not practicable to send men into the field un- 
til the first of April. Because of this interruption 
of the work as the result of the Secretary's refusal 
to permit it to proceed, we had thus lost from early 
in October to April, We got what data we could 
during April, May and June, which, as already 
stated, was merely supplementary to data which wc 
had been ten years in collecting. 

"On the 12th of July (1918), twenty-three re- 
ports were submitted to the Secretary, relating to 
the cost of producing various agricultural products, 
including wheat and beef. I may say that the 
data on the cost of producing beef consisted in part 
of careful bookkeeping records covering one hun- 
dred and forty-one farm years and the fattening of 
over forty-eight thousand steers. These reports 
are now in the possession of the Secretary of Agri- 
culture and have been since the 12th of July. 

Secretary Houston on 'Methods'. 

"In his letter of November 7, 1918, to the Presi- 
dent of the Senate, Secretary Houston, commenting 
on cost of production studies, said: 

'About a year ago the results of one of the 

studies were brought to my attention. After an 



THE COMING LAND POLICY 63 

examination of them, and in view of the criti- 
cisms by competent experts of similar studies, I 
indicated to Doctor Spillman, who was Chief of 
the Office of Farm Management until Septem- 
ber 1 (1918), that I questioned the validity of 
the methods pursued in the studies and was of 
the opinion that the exposition and interpreta- 
tion of the data were not adequate. Indicated to 
him my desire that careful consideration be given 
the whole matter and that a system of inquiry 
and interpretation be devised which would be re- 
garded by competent students of farm economics 
as sound, and which would furnish results rea- 
sonably reliable and creditable to the depart- 
ment.' 

"I am willing to be quoted as questioning the 
veracity of the Secretary in that statement. He 
never advised me to use any methods in this in- 
vestigation. What he did was to order me to stop 
all such investigations, stating as his reasons there- 
for that the farmer is entitled to no information on 
cost of production. 

"This opposition of the Secretary to work on cost 
of production has been persistent since the early 
days of his administration. It is true that by stren- 
uous and persistent effort I had been able to force 
to publication a number of bulletins relating to 
cost of production. But at various times the Secre- 
tary called me down hard for offering such material 
for publication, making it perfectly clear to me 
that he did not desire such work to be done by the 
Department. 

"To show that this was the fixed policy of the 
Secretarv, I may refer to the fact that very early in 
his administration there was circulated through the 



64 THE COMING LAND POLICY 

Department of Agriculture a sheet in which Sec- 
retary Houston concurred, that the Department of 
Agriculture should conduct no investigation that 
would reveal the profits made by farmers on the 
cost of producing farm products, and that no rep- 
resentatives of the Department of Agriculture 
should ever even intimate that it is possible to pro- 
duce too much of any product. It was the business 
of the farmer, this anonymous circular stated, to 
produce, and it was the business of the Department 
of Agriculture to show the farmer how to produce. 

Why Carver Left the Department. 

"As further evidence of the domination of the 
Rockefeller interests in the Department, I may cite 
the establishment by Mr. Rockefeller through his 
General Education Board, of a bureau in the De- 
partment of Agriculture known as the 'Rural Or- 
ganization Service'. It later transpired that the 
purpose of Mr. Rockefeller in establishing this 
bureau was to control the work of the Department 
and of the various agricultural colleges of the 
country; but these gentlemen made the mistake of 
thinking that any man who was paid a good salary 
would do what he was ordered to do. They em- 
ployed Prof. T. N. Carver, of Harvard University, 
to head this new bureau. Professor Carver came to 
the Department with much enthusiasm for his 
work. 

"This important work of the Bureau of Mar- 
kets was made subject to the Rockefeller Bureau 
in order that its activities might be kept properly 
under control. Professor Carver worked very hard 
and conscientiously and in due time worked out a 
series of very important projects, the carrying out 
of which would have resulted in great good to 






THE COMING LAND POLICY 65 

American farmers. These projects called for an 
expenditure on the part of the General Education 
Board of $160,000 a year. When they were sub- 
mitted to the Board with the estimates, the Board 
simply voted to give no money whatever for this 
purpose, and made no explanation of why they 
took this action. Shortly after that, another type- 
written sheet was circulated through the Depart- 
ment. It related to Professor Carver's work, and 
stated that Professor Carver had misunderstood 
what Mr. Rockefeller wanted. Mr. Rockefeller 
did not want to build up a big central organization 
for developing rural economic problems. What 
Professor Carver should do was to employ about 
half a dozen of the ablest men he could find and 
send them around to the various state institutions 
and endeavor to interest the professors of econom- 
ics in these institutions in such investigations. Mr. 
Rockefeller would be very liberal with his funds for 
this purpose. (See foot note by the author.) 

"Professor Carver sought an interview with the 
members of the General Education Board, in which 
he asked them if their purpose in getting him in 
the Department of Agriculture was to remove the 
taint from Mr. Rockefeller's money and induce in- 
stitutions to accept it that are now refusing it. 
They declined to answer this question." 

FOOTNOTE: Both the members of the General Ed- 
ucation Board and the men who control the Agricultural 
Department, may have really considered that it would be 
detrimental to the public interest to enlighten the farmer 
in modern business methods, especially in business ac- 
counting. 

Such an enlightenment would doubtless stimulate agri- 
cultural business organization and combination between 
the farmers, particularly in the matter of selling their 
products. The Board' may have feared that the farmer, 



66 THE COMING LAND POLICY 

if better organized on the financial side of his business, 
would combine against the consumer and curtail produc- 
tion for the purpose of needlessly increasing the prices 
of food products. Such a fear might have been quite 
natural to the Board's members. In fact, profiteering of 
this kind would occur in some cases. But to oppose for 
su.;h a reason any improvement in business methods of 
farming is sheer social folly of an extremely dangerous 
nature, especially since it is so vital that the white men 
return to the land. Incidental drawbacks, that at times 
inevitably accompany social reforms, must be met in a 
direct manner and not by suppressing progress itself. 






